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1

A non-current liability has been included as a current liability. What will be the effect when this is corrected?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

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2

A business purchases a new van. The table shows the purchase invoice details. $ purchase price 13 000 delivery charge sign writing road tax tank of fuel How much should be debited to the motor van account?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

3

In preparing the financial statements, an accrual for rent payable was treated as a prepayment. What effect does this have on the profit and the current liabilities?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

4

The following information is available for a business. $ trade receivables at 1 January 63 000 provision for doubtful debts at 1 January 1 890 total credit sales for January 327 000 cash from customers after 4% settlement discount 324 000 A provision for doubtful debts of 2% is to be made. What adjustment is required in the income statement?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

5

The following information relates to non-current assets. $ net book value at 1 January 2013 20 000 net book value at 31 December 2013 18 000 receipts from disposals 3 500 assets bought 9 700 loss on sale What is the depreciation charge for the year?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

6

The table shows information from a sales ledger control account. $ opening balances 260 497 closing balances 286 190 cash received 581 640 irrecoverable debts 33 200 contra entries 17 310 What is the credit sales figure?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification

Open

7

Where would the difference between the total debits and the total credits in a trial balance be recorded?

1. Financial accounting (AS Level)  →  1.2. The accounting system

1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

8

The table shows extracts from a business’s bank reconciliation. $ balance per cash book at 31 December balance per bank statement at 31 December bank charges per bank statement not entered in cash book outstanding cheques not presented at the year end What is the bank balance to be shown...

1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification

Open

9

During the past month, a business lost some inventory because of theft. The table shows the trading results for the month. $ opening inventory, at cost 50 000 purchases 220 000 sales 300 000 closing inventory, at cost 16 000 The mark up is 25%. What was the cost price of the stolen inventory?

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

Open

10

Frank and George have been in partnership for a number of years, sharing profits and losses in the ratio 2 : 1. They decide to admit Harry into the partnership. The new profit and loss sharing ratio between Frank, George and Harry will be 3 : 2 : 1. Goodwill is to be valued but will not remain in the books of account. How does the introduction of Harry to the partnership affect the capital accounts of Frank and George?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

11

Which item will not appear in the income statement of a sole trader?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

12

What is not part of a company’s equity?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

13

In departmental accounts, which overhead might be apportioned according to floor space?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.1. Activity based costing (ABC)

Open

14

A manufacturer provides the following information. $ total rent 50 000 factory heat and light 8 000 carriage inwards 2 000 carriage outwards 3 000 indirect labour 60 000 total factory overheads 98 000 Which proportion of rent relates to the factory?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

Open

15

Partnership capitals are $60 000 for X and $90 000 for Y. The partnership agreement provides for interest on capitals at 10% per annum, but makes no other financial provisions. Profits for the current year total $75 000. How will the total profits be divided between the partners?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

16

The following is an extract from the statement of financial position for a company at 31 December 2012. cost $ depreciation $ net book value $ non-current assets 250 000 95 000 155 000 The assets have a residual scrap value of $12 500. Depreciation policy is provided using the reducing balance method at a rate of 25% per annum. What is the depreciation charge for the year ended 31 December 2013?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

17

The following financial information is available. $ inventory at 1 January 2013 inventory at 31 December 2013 1 010 ordinary goods purchased 9 260 carriage inwards revenue 18 000 discount received other costs 3 880 What are the values of gross profit and profit for the year?

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

1. Financial accounting (AS Level)  →  1.6. Analysis and communication of accounting information

Open

18

Z is admitted as a new partner in the partnership of X and Y. He brings the following into the business. $ cash 20 000 inventory 6 000 vehicle 11 000 Interest on capital is calculated at 10% per annum. There is no goodwill on Z’s admission. What will be Z’s interest on capital?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

19

Radis Limited pays dividends on ordinary shares in the range of 8% to 12% each year. The current dividend is $20 000. The directors do not wish to increase this by more than 25% in the coming year. There are currently 400 000 ordinary shares of $0.50 each in issue. The company now wishes to issue more shares. What is the maximum number of shares it can issue while keeping its dividend in the usual range?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

Open

20

Why are debentures usually secured on a company’s assets?

1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

21

A business has $10 000 in the bank and buys inventory for $6000 paying by cheque. What is the effect of this on its current ratio and quick (acid test) ratio?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

1. Financial accounting (AS Level)  →  1.6. Analysis and communication of accounting information

Open

22

A supplier wishes to see the financial statements of a customer to help decide whether to continue trading with him. Which figure would be most useful in making that decision?

1. Financial accounting (AS Level)  →  1.6. Analysis and communication of accounting information

3. Financial accounting (A Level)  →  3.1. Preparation of financial statements

Open

23

A business increased its sales revenue by 50% in one year whilst its cost of sales has increased by 60% over the same period. What is the explanation for the change in profit margin?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

24

A business has a year end of 31 December. It expects to achieve sales in 2014 of $450 000. On 31 December 2013 its non-current assets were $306 000. On 1 July 2014 it purchased new machinery at a cost of $180 000, in order to increase its sales by an extra $20 000 each month. What is the expected rate of non-current asset turnover in 2014?

1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets

Open

25

What does the line between points X and Y on the break-even chart represent?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

Open

26

Extracts from the costing records of a builder who has completed two houses are shown...

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

27

Which item needs to be increased to make a break-even point fall?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

Open

28

A business provides the following information about a product. $ variable cost per unit selling price per unit total fixed costs 35 000 budgeted profit 95 000 How many units should it produce to achieve the budgeted profit?

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour

Open

29

The following information is available for a manufacturing company for June 2014. budgeted overheads $108 000 actual overheads $112 000 budgeted labour hours 24 000 actual labour hours 23 000 What is the over or under absorption of overheads for June 2014?

2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open

30

A business provides the following information for July. $ budgeted bank overdraft at 1 July 12 000 total receipts banked 250 000 total cheque payments 195 000 depreciation of non-current assets 20 000 What is the budgeted bank balance at 31 July?

4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control

Open